Proposal - Establish a Sole Source Management Process

In: Business and Management

Submitted By xinglele
Words 1789
Pages 8
Proposal – Establishing Sole Source Management Process in company N

1. Introduction
The purpose of this proposal is to suggest the SCM manager in our company ( company N) to establish a formal business process in sole source vendor management immediately.
Sole source is a non-competitive purchase or procurement process accomplished after soliciting and negotiating with only one source, so-called sole source, thus limiting Full and Open Competition (FOC).
The current situation in our company is there is about 20 sole source vendors listed in the company Approved Manufacturers’ List (AML). It is mandatory for all our four EPC companies to use the sole source vendor without open bids for those specific products.
However, a significant issue we are facing now is that our company doesn’t have a process in place to manage the sole source vendors. One of the two critical problems is proper documentation justifying why each sole source vendor is selected is not in place. The other major issue is that there is no agreement established with these sole source vendors (covering pricing, maintenance, etc). According to EPC schedules, they need to start to award Purchase Orders. But when it comes to sole sourced products, they are not clear on how to proceed. One urgent example is now it is the time for unit 20 Fluor to purchase gasket but they have no idea if they should start negotiating the pricing and other terms on behalf of our company or they should wait until our company to negotiate it and then give them direction. The other units represented by other EPCs have similar pressing needs for other sole sourced products. This issue has drawn the attention of the Project Managers and project upper management team and they requested SCM procurement to address it immediately.
To solve all these issues, it is safe to conclude that there is an immediate need to…...

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